InvestorQ : Do you see practical problems in paying fund manages in units instead of cash? If not, what is a better way to prevent cases like Templeton?
Niti Shenoi made post

Do you see practical problems in paying fund manages in units instead of cash? If not, what is a better way to prevent cases like Templeton?

Answer
image
ishika Banerjee answered.
2 months ago
Follow

Even if you leave out implementation issues, there are a lot of questions that can be raised on this move to pay senior fund managers in units. There is an issue of sub-optimal asset allocation. Secondly, mandatory lock-in becomes a challenge if the manager is leaving the fund. The bigger concern is that too much of micro regulation may wean away talent.

The real answer is not to penalize all fund managers but to bring the guilty fund manages to book quickly. More so, when they did not act in the interests of the unit holders. SEBI can even hold AMCs and fund managers liable to disgorge unitholder losses as a deterrent measure. That is harsh, but it works in other countries. SEBI needs to specifically attack the specific persons who are taking investors money for granted. That is the key.

1 Views